Pursuit of profit and wider social impact – incompatible or essential for startups?

Earlier this week the New Entrepreneurs Foundation held their first annual conference at the Livery Hall in Guildhall, central London. Not sure why it’s taken them three years to get round to putting on their first dedicated conference, but they delivered a great event and hopefully it’s with us now for years to come.

The venue, the Livery Hall at the Guildhall, was something impressive to see. It looked something like the insides of a grand old church with its stone pillars and high ceilings, but one level below the street outside and tucked under the Guildhall complex, it was quite a special place to be invited to.

The topic of discussion for the conference was “Pursuit of Profit and Wider Social Impact – Incompatible or Essential for Start-Ups?” The format of the conference was for a networking reception and drinks, followed by some key note speeches and then a panel discussion around the topic of the day.

To start us off, CEO of the NEF Neeta Patel gave and introduction and brief synopsis of the work and achievements of the NEF and then we were all welcomed by Mark Boleat of the City of London Corporation.

First to take the stage was our key note speaker, social entrepreneur and founder of The Big Issue, John Bird. I’ve never met John before or heard his story, but like most I’m well familiar with The Big Issue so was keen to listen to his story and John didn’t disappoint. John’s story was hugely engaging and at times amusing, as he recalled the early days of his work setting up the Big Issue. I hadn’t been aware of it until he told us, but John himself is an ex-offender and his thoughts and insights on offenders, ex-offenders and stigmatisations around homelessness, crime and poverty, were all very interesting and poignant.

After that, John joined the rest of the panel for the main discussion and Q&A session. Alongside John, I thought the panel had been well selected and designed with the topic of discussion in mind. We had Rob Forkan, founder of Gandys flip flops, Gary Grant, founder of The Entertainer and also The Grant Foundation, and Simon Boyle, founder of The Brigade and also the Beyond Food Foundation. Each member of the panel spoke for 5-10mins, giving us their background stories and tales of their experiences trying to instil social benefits in their business ventures. Some of the more interesting discussion arose when we moved into the Q&A session and a few tasty questions were thrown in by the audience. One interesting debate was around whether business owners should be obliged, whether morally or otherwise – to ensure that all their employees receive not just the minimum UK wage, but the ‘living’ wage. This seemed to generate some passion with one member of the audience arguing that rather than donating a portion of profits to charities, one of the panel members should instead use that money to bridge the gap in his employee’s salaries to meet the living wage. On the counter argument, the business owner argued that he was building an ethical and socially conscious business and was increasing his employee salaries year on year, but wasn’t yet in a position to be able to offer the living wage in all cases. This was an interesting point in case – here was a start-up business, trying to grow and remain sustainable and profitable whilst at the same time being fair and just to its employees. The struggle is obvious, this employee has every intention of building a fair and transparent business, but the financials of his early stage business restrict him for fully realising that just yet.